in effect
This is a final rule labeled a “technical amendment” from the Labor Department’s Employee Benefits Security Administration. It carries out court orders that struck down (vacated) the Department’s 2024 rule on who counts as a retirement-investment “fiduciary.” It directs that the old regulatory text be put back into the Code of Federal Regulations and republishes an earlier exemption in full, taking effect April 20, 2026.
The 2024 Fiduciary Rule never took effect (courts had paused it and later entered final judgment), so this document removes it from the regulations and restores the prior “five-part test” for fiduciary status that dates back to 1975. It also cancels the Department’s 2024 changes to a related exemption, Prohibited Transaction Exemption 2020-02, and reprints that exemption’s original December 18, 2020 text word-for-word. The Department further states that the entire explanatory preamble to that 2020 exemption is now effectively void and should not be relied on as guidance, because courts invalidated parts of it and the rest is too intertwined to trust. The operative conditions of the exemption itself stay fully in force — including the “Impartial Conduct Standards,” best-interest and reasonable-compensation requirements, written disclosures, policies and procedures, an annual retrospective compliance review, and a 10-year ineligibility trigger tied to certain criminal convictions. The Department skipped public notice-and-comment, citing “good cause” because it is only carrying out court orders, and concluded the action imposes no new costs or legal obligations.
Financial institutions and investment professionals who give paid investment advice to retirement savers — such as registered investment advisers, broker-dealers, banks, and insurance companies — along with the retirement plans, plan participants, and IRA owners they advise. For these firms, the legal test for when they are treated as fiduciaries reverts to the older five-part test, while the conditions they must meet to use the 2020-02 exemption (and keep otherwise-prohibited compensation) remain the same.